Week 46 (2017)

Week of November 13, 2017 through November 17, 2017

Teresa Hensley v. Michael Price (Agee, amended 11/17/2017): The Fourth Circuit held that the defense of qualified immunity does not apply to defendant police officers where the officers shoot and kill an armed man who does not point a weapon at the officers or otherwise threaten them. The Court reasoned that probable cause to believe the man poses a risk of serious immediate physical harm to the officers does not exist in such a situation, and accordingly that shooting a person for possession of a weapon amounts to an unreasonable seizure under the Fourth Amendment. Therefore, the Fourth Circuit overturned the district court’s order granting summary judgment in the officers’ favor because the officers were not entitled to qualified immunity. Full Opinion

Ronald Schilling, Jr. v. Schmidt Baking Company, Inc. (Keenan 11/17/2017): The Fourth Circuit held that drivers of mixed fleets of trucks are “covered employees” under the Technical Corrections Act of 2008 (“TCA”), entitling them to overtime wages under the Fair Labor Standards Act (“FLSA”). Generally, professional motor carriers are exempt from paying overtime wages for hours worked in excess of 40 hours in a week. However, the Fourth Circuit determined that Congress waived this exemption for covered employees under the TCA, whereby an employee is covered if his work, in whole or in part, affects the safety of vehicles weighing 10,000 pounds or less. Because employees are required only to work on smaller vehicles in part to qualify for overtime, the court concluded that drivers of mixed fleets are entitled to overtime as covered employees. Consequently, the Fourth Circuit vacated the district court’s order dismissing the plaintiffs’ claims for overtime wages under the FLSA, affirmed the dismissal of the plaintiffs’ state law claims, and remanded for further proceedings consistent with its opinion. Full Opinion

Anthony Juniper v. David Zook (Wynn 11/16/2017): The Fourth Circuit held that a district court abuses its discretion when it fails to conduct an evidentiary hearing on a petitioner’s claim that the prosecution violates Brady v. Maryland, 373 U.S. 83 (1963) by improperly withholding exculpatory evidence. The Fourth Circuit concluded that the district court erred in its analysis because it (1) failed to construe facts in a light most favorable to the petitioner, (2) failed to properly account for the impeachment value of the withheld evidence, and (3) improperly made credibility determinations from the record. Consequently, the court vacated the district court’s judgment on the petitioner’s Brady claim and remanded for further proceedings consistent with its opinion. Full Opinion

Maguire Financial, LP v. PowerSecure International,Inc. (Duncan 11/15/2017): The Fourth Circuit, in a securities fraud class action, held that an inference that the defendant company’s executive may have known his statement was false was not sufficient to show the executive intended to deceive securities analysts and investors under the scienter requirement of Section 10(b) of the Securities Exchange Act of 1934. The court reasoned that the plaintiff-appellant failed to adequately allege facts giving rise to a strong inference of intentional or reckless deception, manipulation, or defrauding of investors. Accordingly, the Fourth Circuit affirmed the district court’s dismissal of the appellant’s amended complaint. Full Opinion

US v. Terrell Banker (Agee 11/14/2017): The Fourth Circuit held that a district court properly instructs a jury regarding the scienter element of multiple criminal sexual offenses against minors by instructing that the Government is not required to prove the defendant’s actual knowledge of a minor’s age for the offense. The defendant was charged with three offenses: (1) conspiracy to engage in sex trafficking of a minor, (2) sex trafficking of a minor, and (3) enticement of a minor for illegal sexual activity. For the first two offenses, the Fourth Circuit concluded that the relevant statute (18 U.S.C. § 1591(a)) required either knowledge orreckless disregard for the minor’s age. For the third offense, the Fourth Circuit concluded that the word “knowingly” within the statute (18 U.S.C. § 2422(b)) did not apply to the age requirement, so the Government did not have to prove that the defendant knew the minor’s age. The court also determined that there was sufficient evidence to show that the defendant knew or recklessly disregarded the minor’s age. Therefore, the Fourth Circuit upheld the district court’s jury instruction and the appellant’s subsequent convictions. Full Opinion

OpenRisk, LLC v. MicroStrategy Services Corp. (Harris 11/13/2017): The Fourth Circuit held that the federal Copyright Act preempts state claims for computer fraud, conversion of intellectual property, and misappropriation of trade secrets. Here, the court determined that the plaintiff’s claim did not possess an additional element that made it qualitatively different from a copyright infringement claim for violations of the right of reproduction and distribution, and therefore that the claim was preempted by the Copyright Act. Consequently, the Fourth Circuit affirmed the district court’s grant of summary judgment on the appellant’s copyright infringement claim, in addition to claims for computer trespass, tortious interference, and conspiracy claims. Full Opinion

Highlight Case

Ronald Schilling, Jr. v. Schmidt Baking Company, Inc., No. 16-2213

Decided: November 17, 2017

The Fourth Circuit held that drivers of mixed fleets of trucks are “covered employees” under the Technical Corrections Act of 2008 (“TCA”), entitling them to overtime wages under the Fair Labor Standards Act (“FLSA”). Generally, professional motor carriers are exempt from paying overtime wages for hours worked in excess of 40 hours in a week. However, the Fourth Circuit determined that Congress waived this exemption for covered employees under the TCA, whereby an employee is covered if his work, in whole or in part, affects the safety of vehicles weighing 10,000 pounds or less. Because employees are required only to work on smaller vehicles in part to qualify for overtime, the court concluded that drivers of mixed fleets are entitled to overtime as covered employees. Consequently, the Fourth Circuit vacated the district court’s order dismissing the plaintiffs’ claims for overtime wages under the FLSA, affirmed the dismissal of the plaintiffs’ state law claims, and remanded for further proceedings consistent with its opinion.

The plaintiffs, Ronald Schilling, Russell Dolan, and Jonathan Hecker (collectively, “the Plaintiffs”) frequently worked more than 40 hours per week but were not given overtime payments. Thus, they claimed that they were entitled to overtime payments. The Plaintiffs were district sales managers for the defendant Schmidt Baking Company, Inc. (“Schmidt”), which distributed baked goods to various stores across several states. When independent operators were unavailable or otherwise unable to complete deliveries, the Plaintiffs would deliver the baked goods themselves. According to the Plaintiffs, they spent between 65% and 85% of their time at work making deliveries and made 70% to 90% of their deliveries in their personal vehicles, which each weighed less than 10,000 pounds. The district court granted a motion to dismiss the Plaintiffs’ claims for overtime. The Fourth Circuit reviewed the motion to dismiss de novo and drew all reasonable inferences in the Plaintiffs’ favor.

The FLSA requires employers to pay overtime to employees who work over 40 hours in a single workweek. Generally, professional motor carriers are exempt from paying overtime wages to employees for hours worked in excess of 40 hours in a week. However, this exemption is waived if an employee is deemed a covered employee. The TCA classifies an employee as covered if his work, in whole or in part, affects the safety of vehicles weighing 10,000 pounds or less in transportation on public highways in interstate commerce. Because employees are required only to work on smaller vehicles in part to qualify for overtime, the court concluded that drivers of mixed fleets are entitled to overtime wages as covered employees.

Here, Schmidt was a professional motor carrier. However, the Plaintiffs made 70% to 90% of their deliveries in their small personal vehicles, so the Fourth Circuit determined that their work affected the safety of vehicles weighing 10,000 pounds or less at least in part. Further, the Plaintiffs frequently delivered baked goods in various states, so their work affected the safety of vehicles in transportation in interstate commerce. Consequently, the Plaintiffs were deemed covered employees who were entitled to overtime.

Accordingly, the Fourth Circuit vacated the district court’s order dismissing the Plaintiffs’ claims for overtime wages under the FLSA, affirmed the dismissal of the Plaintiffs’ state law claims, and remanded for further proceedings consistent with its opinion.